[Asia Economy Reporter Jeong Hyunjin] The Nikkei 225 index in Japan closed down more than 2% on the 16th despite the Bank of Japan (BOJ) announcing additional monetary easing measures.
On the Tokyo Stock Exchange that day, the Nikkei 225 index closed at 17,002.04, down 2.46% (429.01 points) from the previous trading day. This is the lowest level in 3 years and 4 months since November 9, 2016.
The Nikkei 225 index started the day up 0.89%, but fluctuated as the U.S. Federal Reserve (Fed) took measures such as suddenly lowering the benchmark interest rate by 100 basis points (1bp=0.01 percentage point) to mitigate the economic impact of the spread of the novel coronavirus (COVID-19).
At 12 p.m. that day, the BOJ held its monetary policy meeting earlier than scheduled, which was originally planned for two days later, raising market expectations that measures such as a rate cut would be introduced to prevent economic slowdown. However, excluding a rate cut, the BOJ only implemented additional monetary easing by doubling the size of its exchange-traded fund (ETF) purchases. Nihon Keizai explained that the market showed disappointment with this measure.
After the BOJ’s monetary easing measures were announced, the Nikkei 225 index briefly plunged 2.96%, breaking below the 17,000 level, but managed to hold above 17,000 by the end of the session. Although Prime Minister Shinzo Abe described the BOJ’s additional monetary easing measures as a "swift and appropriate response" during the House of Councillors Budget Committee that day, the market reacted coldly.
The TOPIX index also closed down 2.01% (25.36 points) at 1,236.34 that day.
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